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Jury out on Brexit but calls for greater cooperation to undo de-risking

7 October 2016

Central bank governors have been hearing about the risks Brexit and de-risking poses for Commonwealth countries. They were told that the jury was still out on how Britain's exit from the European Union would affect trade, remittances, aid and investment in the Commonwealth.

Commonwealth governors welcomed G20 efforts to co-ordinate monetary and fiscal policies to dampen any adverse effects. They were urged to act sooner rather than later to plan and to prepare for any fallout from Brexit.

On the issue of de-risking, where financial institutions have pulled out of certain countries, governors heard that some Commonwealth nations were having to adapt and find ways of getting cash into their countries. The use of informal channels would undermine global efforts to cut money laundering and the financing of terrorism, governors heard.

Governors recognised that the reasons behind de-risking were complex. They called on all key stakeholders to work together to produce practical solutions as a matter of urgency.

The delegates welcomed the indication from the Financial Action Task Force (FATF) that new guidance would soon be finalised to clarify expectations around anti-money laundering and countering the financing of terrorism regulation.